Eligibility criteria for a company to get listed, a company must meet eligibility criteria, including minimum net worth, profitability, market capitalization and promoter holding requirements. It must comply with SEBI regulations, submit financial statements, appoint merchant bankers and ensure adequate public shareholding for stock exchange approval.
Content:
- How to register a company in the Stock Market In India?
- Eligibility criteria for listing of company
- How operational profitability affects listing eligibility
- Minimum financial and operational requirements for NSE and BSE
- What are the requirements for a company to be listed on NSE?
- Eligibility criteria for a company to get listed – Quick Summary
- Eligibility Criteria For A Company To Get Listed – FAQs
How to register a company in the Stock Market In India?
Registering a company in the stock market involves fulfilling specific regulatory and financial requirements to list its shares for public trading. Here’s a step-by-step overview:
- Prepare Financial Records: Maintain audited financial statements for at least three years.
- Meet Eligibility Criteria: Ensure compliance with SEBI and stock exchange regulations, including net worth and profitability benchmarks.
- Appoint Merchant Bankers: Engage SEBI-registered merchant bankers to manage the listing process.
- Draft Prospectus: Create a Draft Red Herring Prospectus (DRHP) detailing company operations, financials and risks.
- Apply for Approval: Submit the DRHP to SEBI and stock exchanges like NSE or BSE for review and approval.
- Conduct IPO: Issue shares to the public via an Initial Public Offering (IPO).
- List Shares: Post-IPO, the shares are listed and begin trading on the exchange.
Eligibility criteria for listing of company
To list a company, it must meet stock exchange-specific criteria. These include a minimum paid-up equity capital, profitability in the last three years and adequate net tangible assets. Public shareholding must be at least 25% of post-listing equity.
SEBI regulations require companies to file a Draft Red Herring Prospectus (DRHP) detailing business operations, risks and financial health. Merchant bankers oversee the process, ensuring regulatory compliance and investor transparency.
Promoters must hold a minimum percentage of shares post-listing, subject to a lock-in period. Companies must demonstrate consistent operational profitability and maintain high corporate governance standards to attract and retain investor trust.
How operational profitability affects listing eligibility
Operational profitability showcases a company’s ability to generate consistent income from core activities. It assures regulators and investors of financial stability, making it a critical factor for meeting listing requirements.
Profitability benchmarks often include positive earnings before interest, taxes, depreciation and amortization (EBITDA) over a specific period. It reflects efficient resource management and operational resilience, enhancing investor confidence during the listing process.
Sustained profitability impacts a company’s valuation and IPO pricing. It indicates long-term growth potential, ensuring compliance with stock exchange norms and attracting quality institutional and retail investors post-listing.
Minimum financial and operational requirements for NSE and BSE
Meeting financial and operational benchmarks is essential for listing on the NSE and BSE. These requirements ensure the company’s stability and investor protection.
- Minimum Paid-Up Capital: ₹10 crore for BSE and ₹1 crore for NSE SME platform.
- Net Tangible Assets: ₹3 crore or more for SME platforms.
- Profitability: Minimum three years of profitability for mainboard listings.
- Promoter Contribution: 20%-25% of post-issue capital locked in for three years.
- Public Shareholding: At least 25% post-listing.
What are the requirements for a company to be listed on NSE?
Listing on NSE requires adherence to strict financial and operational norms. Companies must ensure transparency and meet investor-friendly criteria to gain approval.
- Net Worth: Minimum ₹3 crore with positive net worth for SME platform listings.
- Public Offer Size: Minimum of ₹10 crore for IPO.
- Corporate Governance: Compliance with SEBI listing obligations and disclosure requirements.
- Audited Financials: Three years of audited accounts with profitability.
- DRHP Submission: File a Draft Red Herring Prospectus for SEBI and NSE approval.
Eligibility criteria for a company to get listed – Quick Summary
- A company must fulfil criteria like net worth, profitability, market capitalization, SEBI compliance and public shareholding and appoint merchant bankers to secure stock exchange listing approval.
- Registering a Company in the Stock Market
- To register, companies must prepare audited financials, meet SEBI criteria, engage merchant bankers, draft a prospectus and secure approval before listing shares post-IPO.
- Companies need minimum equity capital, profitability, public shareholding of 25%, SEBI-compliant disclosures, promoter holding and strong governance to meet stock exchange-specific requirements.
- Operational profitability ensures financial stability, meeting benchmarks like EBITDA positivity. It impacts valuation, IPO pricing and compliance, fostering investor confidence and fulfilling listing requirements.
- Companies need paid-up capital, net tangible assets, profitability, promoter contribution and public shareholding benchmarks to meet NSE and BSE’s listing requirements for mainboard and SME platforms.
- Listing on NSE requires a net worth of ₹3 crore, a public offer size of ₹10 crore, three years’ audited profitability, governance compliance and filing of a Draft Red Herring Prospectus.
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Eligibility Criteria For A Company To Get Listed – FAQs
Listing in stocks refers to the process by which a company’s shares are admitted to trading on a stock exchange, enabling public investors to buy and sell its securities.
A company must meet criteria like minimum paid-up equity, net worth, profitability, public shareholding, governance standards and SEBI compliance to be eligible for public listing on exchanges like NSE or BSE.
NSE Main Board requires ₹10 crore paid-up equity capital, ₹3 crore minimum net worth, three years of profitability and a public issue size of at least ₹10 crore.
For the BSE Main Board, the minimum market capitalization requirement is ₹25 crore, ensuring the company’s valuation supports public trading and investor confidence.
Companies must submit a Draft Red Herring Prospectus (DRHP), financial statements, governance declarations, agreements with merchant bankers and compliance documents to regulatory bodies like SEBI and the stock exchange.
Companies must submit a Draft Red Herring Prospectus (DRHP), financial statements, governance declarations, agreements with merchant bankers and compliance documents to regulatory bodies like SEBI and the stock exchange.
NSE SME requires a minimum paid-up capital of ₹1 crore, net tangible assets of ₹3 crore, positive net worth and governance compliance. The Main Board criteria are stricter, demanding higher financial benchmarks.
While profitability is a key listing requirement for mainboards, SME platforms may allow companies with strong potential but losses, provided they meet net worth and governance standards.
Stock exchanges often evaluate average daily turnover and trade volume post-listing to ensure liquidity, though these factors are not prerequisites for initial listing approval.
Yes, BSE and NSE have distinct requirements. BSE often focuses on paid-up capital and net worth, while NSE emphasizes profitability, governance and larger public issue sizes for the mainboard.
Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
